Human Resources/Marketing Management

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Expert: Leo Lingham - 1/15/2013

QuestionCase Study on Maruthi Udyog Ltd.

Maruti Udyog L:td.MUL is the largest auto manufacturer in India. It has 70 percent share of the small car segment and 40 percent of the luxury segment. It was set up as a joint venture between the Government of India and Suzuki motors of Japan. Today the government has reduced its stake and it is a Suzuki firm. It has a vendor network of nearly 450, a third of who have ISO 9000 certification. It also has joint ventures with some of its vendors to ensure quality and timely delivery. Maruti has about 14 models to cars, vans and jeep. In the small car segment, it completes with Santro of Hyundai and Indica from the Tatas.

Maruti’s vision and mission statement are given below
Vision: To be competitive worldwide in products and services retain leadership in the country and aspire for a good market share internationally.
Mission: To sell a variety of cars- modern, high technology and fuel efficient – in the Indian and foreign markets.
The firm’s values are as follows
Growth oriented organization ready to change to meet customers demand at short notice.
Value for money for the customers.
Stakeholders’ involvement and satisfaction.
Responsible corporate citizen.

Competitive Analysis of Maruti

Maruti had a good run till 1998 when several international players challenged its supremacy . In the small car segment, Santro of Hyundai, and Indica from the Tatas pose major problems for Maruti . In the luxury segment, its Esteem faces competition from Honda City, Opel Astra , Ford Escort and Ford Ikon. Its jeep Gypsy faces competition from Mahindra& Mahindra’s jeeps, and Tata’s Sumo and Safari.

Threat of new entrants is real as the segment of middle class cars is growing rapidly, Volvo, Volkswagen and Toyota are also planning to enter the market.

To beat Maruti’s brand image, economics of scale and marketing and service network , new firms have to spend a lot of money and efforts and that could be the entry barrier.
Critical success factors of Maruti:
1. Suzuki technology
2. Economic scale of production
3. Strong R&D.
4. Timely market feedback as a result of continuous research
5. Large range of models.
6. Strong dealer network
7. Large service network around the country with trained technicians.
8. Quality programmes (Kaizan)
9. Design expertise
10. Brand equity
11. Provides leasing options, hire purchase schemes.

Realising the imminence of competition in 1998 , Maruti planned to have relationship marketing , with an idea of selling Maruti cars to its existing customer base and upgrading product purchase . Maruti introduced Zen Alto and Wagon R, for this purpose.
MUL has competitive advantages in the segments it operates in to counter the onslaught of competition it even reduced the price and went for volume business .MUL has maintained its competitive advantage in the following manner.
1. Superior Suzuki compact car technology.
2. Value for money
3. Low maintenance cost.
4. Reliable quality
5. Largest network of dealers and service centres.
6. large product range for various needs and pockets.
7. Easy availability and attractive finance schemes .
8. ISO certification, even for a large number of dealers.
9. Technology transfers to important vendors for ensuring quality supplies.

Maruti is a household’s name not only in India but in a number of countries of the west as well. With a modest beginning in 1997 when it exported 102 cars, now MUL exports to more than 30,000 cars to 74 countries. The countries include Italy, Holland and Chile; around 70 percent sales are to Europe.
Maruti looks confidently to the future with the following agenda:
1. Commitment to customer satisfaction/delight.
2. Expansion and modernization of facilities.
3. New model as per market demand
4. Model upgradation .
5. Market research to remain proactive in the market.
6. Emphasis on overseas markets
7. Finance for the customers.

Questions:
1. Discuss the main issues narrated in the case in your own style.
2. Carry out a SWOT Analysis.

AnswerQuestion: Case Study on Maruthi Udyog Ltd.

Maruti Udyog L:td.MUL is the largest auto manufacturer in India. It has 70 percent share of the small car segment and 40 percent of the luxury segment. It was set up as a joint venture between the Government of India and Suzuki motors of Japan. Today the government has reduced its stake and it is a Suzuki firm. It has a vendor network of nearly 450, a third of who have ISO 9000 certification. It also has joint ventures with some of its vendors to ensure quality and timely delivery. Maruti has about 14 models to cars, vans and jeep. In the small car segment, it completes with Santro of Hyundai and Indica from the Tatas.

Maruti’s vision and mission statement are given below
Vision: To be competitive worldwide in products and services retain leadership in the country and aspire for a good market share internationally.
Mission: To sell a variety of cars- modern, high technology and fuel efficient – in the Indian and foreign markets.
The firm’s values are as follows
Growth oriented organization ready to change to meet customers demand at short notice.
Value for money for the customers.
Stakeholders’ involvement and satisfaction.
Responsible corporate citizen.

Competitive Analysis of Maruti

Maruti had a good run till 1998 when several international players challenged its supremacy . In the small car segment, Santro of Hyundai, and Indica from the Tatas pose major problems for Maruti . In the luxury segment, its Esteem faces competition from Honda City, Opel Astra , Ford Escort and Ford Ikon. Its jeep Gypsy faces competition from Mahindra& Mahindra’s jeeps, and Tata’s Sumo and Safari.

Threat of new entrants is real as the segment of middle class cars is growing rapidly, Volvo, Volkswagen and Toyota are also planning to enter the market.

To beat Maruti’s brand image, economics of scale and marketing and service network , new firms have to spend a lot of money and efforts and that could be the entry barrier.
Critical success factors of Maruti:
1. Suzuki technology
2. Economic scale of production
3. Strong R&D.
4. Timely market feedback as a result of continuous research
5. Large range of models.
6. Strong dealer network
7. Large service network around the country with trained technicians.
8. Quality programmes (Kaizan)
9. Design expertise
10. Brand equity
11. Provides leasing options, hire purchase schemes.

Realising the imminence of competition in 1998 , Maruti planned to have relationship marketing , with an idea of selling Maruti cars to its existing customer base and upgrading product purchase . Maruti introduced Zen Alto and Wagon R, for this purpose.
MUL has competitive advantages in the segments it operates in to counter the onslaught of competition it even reduced the price and went for volume business .MUL has maintained its competitive advantage in the following manner.
1. Superior Suzuki compact car technology.
2. Value for money
3. Low maintenance cost.
4. Reliable quality
5. Largest network of dealers and service centres.
6. large product range for various needs and pockets.
7. Easy availability and attractive finance schemes .
8. ISO certification, even for a large number of dealers.
9. Technology transfers to important vendors for ensuring quality supplies.

Maruti is a household’s name not only in India but in a number of countries of the west as well. With a modest beginning in 1997 when it exported 102 cars, now MUL exports to more than 30,000 cars to 74 countries. The countries include Italy, Holland and Chile; around 70 percent sales are to Europe.
Maruti looks confidently to the future with the following agenda:
1. Commitment to customer satisfaction/delight.
2. Expansion and modernization of facilities.
3. New model as per market demand
4. Model upgradation .
5. Market research to remain proactive in the market.
6. Emphasis on overseas markets
7. Finance for the customers.

Questions:
1. Discuss the main issues narrated in the case in your own style.

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1.ISSUE ONE

It was set up as a joint venture between the Government of India and Suzuki motors of Japan. Today the government has reduced its stake and it is a Suzuki firm.
SO SUZUKI HAS TO MANAGE ITS FINANCE ON ITS OWN
=================

2.ISSUE TWO

It also has joint ventures with some of its vendors to ensure quality and timely delivery.
THIS MEANS MORE RESOURCES TO MANAGE THE JOINT VENTURES.
=========================

3.ISSUE THREE
COMPETITION

In the small car segment, it competes with Santro of Hyundai and Indica from the Tatas.

Its jeep Gypsy faces competition from Mahindra& Mahindra’s jeeps, and Tata’s Sumo and Safari.
======================
4.ISSUE FOUR
THREATS OF NEW ENTRANTS

Threat of new entrants is real as the segment of middle class cars is growing rapidly, Volvo, Volkswagen and Toyota are also planning to enter the market.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

2. Carry out a SWOT Analysis.

1.STRENGTHS

-largest auto manufacturer in india.
- It has 70 percent share of the small car segment and 40 percent of the luxury segment.
- It has a vendor network of nearly 450, a third of who have ISO 9000 certification. It also has joint ventures with some of its vendors to ensure quality and timely delivery

MUL has competitive advantages in the segments it operates in to counter the onslaught of competition it even reduced the price and went for volume business .MUL has maintained its competitive advantage in the following manner.
1. Superior Suzuki compact car technology.
2. Value for money
3. Low maintenance cost.
4. Reliable quality
5. Largest network of dealers and service centres.
6. large product range for various needs and pockets.
7. Easy availability and attractive finance schemes .
8. ISO certification, even for a large number of dealers.
9. Technology transfers to important vendors for ensuring quality supplies.

=====================

2.WEAKNESS
-it has to generate its own fund for investment.
-=========================
3. OPPORTUNITIES.
INDIA IS A GROWING MARKET.
Maruti is a household’s name not only in India but in a number of countries of the west as well.
MUL EXPORTS TO A NUMBER OF COUNTRIES.
-To sell a variety of cars- modern, high technology and fuel efficient – in the Indian and foreign markets.
1. Commitment to customer satisfaction/delight.
2. Expansion and modernization of facilities.
3. New model as per market demand
4. Model upgradation .
5. Market research to remain proactive in the market.
6. Emphasis on overseas markets
7. Finance for the customers.

==================
4.THREATS
- Threat of new entrants is real as the segment of middle class cars is growing rapidly, Volvo, Volkswagen and Toyota are also planning to enter the market.